Business Strategies of Small and Medium Enterprises for Value Creation and Competitive Advantage: Basis for a Sustainable Action Plan in Bicol

Abstract

The study examined the business strategies employed by SMEs in Bicol in terms of RBV practices, competitive strategies, and value creation strategies. It also determined significant differences in these strategies when respondents were grouped according to profile variables, examined the relationship between competitive strategies and value creation, and used the findings as a basis for a sustainable business action plan for SME success. The study utilized a descriptive-correlational research design in conjunction with a quantitative research method and involved 120 respondents composed of 45 managers and 75 business owners from 45 participating establishments in the Municipality of Ragay, Camarines Sur. The findings showed that the RBV dimensions were Fully Implemented (M = 4.52–4.58), while Cost Leadership, Differentiation, and Focus Strategies were Highly Effective (M = 4.46–4.59). Value creation for owners, customers, and employees was also Highly Effective (M = 4.29–4.63). Significant differences were found in selected RBV dimensions according to age, position, and industry or sector, while the effectiveness of Porter’s strategies differed by position and, for selected strategies, by industry or sector. All value creation dimensions were significantly and positively related to the three competitive strategies, with the strongest relationship between Focus Strategy and Value to Owners (rₛ = .722, p < .001). The study concluded that SMEs demonstrated full implementation of RBV practices and highly effective competitive and value creation strategies. With this, the study recommends that SMEs sustain and strengthen their existing resource management, competitive strategies, and stakeholder value creation practices while adapting them to selected differences associated with age, management position, and industry context to support long-term competitiveness and business sustainability.